Do you feel stressed every month about whether your revenue will cover your monthly expenses and your owner’s pay? I’m kicking off a series on the podcast about how to increase the revenue in your business without staying on the hamster wheel. First thing’s first: in this episode, I’m showing you how to calculate your monthly baseline revenue based on your income goals and monthly expenses so you know exactly how much you need to bring in every month.
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To calculate your monthly baseline revenue:
Go grab my free Revenue Goal Calculator to help you calculate your goal!
Start off by calculating how much money you need to take home from your business each month to take care of your bills and life expenses. This doesn’t need to be your dream salary for now, just how much you need to not take on personal debt to pay your bills each month. Add on a 25-30% buffer for taxes.
Then, calculate your monthly expenses. This includes your employees’ salaries and payroll taxes, office space, software subscriptions, insurance, etc. As you're gathering these numbers, it’s a great time to evaluate all your expenses and see what unnecessary expenses can be cut.
Your owner’s pay plus your monthly recurring expenses equals your monthly baseline pay. That total is how much money you need to bring in for revenue every month to cover your expenses and not stress about money in your business. Anything extra is icing on the cake that can go towards savings, investments, etc.
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I’m Sarah Young - a CPA, Virtual CFO, and the Owner of Young + Co! I have over a decade of experience in helping entrepreneurs scale their businesses and build wealth at the 6- and 7-figure levels, and I started the Profit + Prosper podcast to help you do the same. Profit + Prosper is a business finance podcast created to help entrepreneurs build their wealth in a way that’s fun and empowering. This is NOT a boring numbers podcast - I will share tactical tips to increase your profit so you can truly prosper in your business and in life. I hope you’ll subscribe so we can Profit + Prosper together!
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